Alphabet sheds $500B as Google admits AI Mode earns less

Alphabet shares fell more than 11 percent on Wednesday, erasing over $500 billion in market value, after Google conceded on its earnings call that its AI-powered search experience earns less per query than the traditional ten-blue-links format it is replacing. Futurism reported the slide came even as consolidated revenue hit $127.6 billion for the quarter, a 25 percent year over year gain.

Google chief business officer Philipp Schindler attributed the slowdown to "lower monetization we're seeing in AI Mode," while framing the shortfall as a timing problem rather than a structural one. "On AI Mode, many of these queries are upper funnel queries, allowing us to capture new, high-value commercial intent," he told analysts, adding that "the majority of AI Mode queries are incremental, creating more monetization opportunities over time."

The numbers behind the pitch were less reassuring. Google Search revenue grew 12 percent year over year to $63.3 billion. Capital expenditures more than doubled from the year earlier to $51.4 billion, nearly all pointed at the AI buildout that is now also eating into the ad unit paying for it.

The hit to publishers has been running in parallel, and is now harder to argue around. Citing a Reuters Institute survey, Futurism reported the number of visits to top news sites plummeted from over 70 million visitors a month in July of 2024 to just over 47 million in July of 2026, as AI Overviews and AI Mode absorbed clicks that once ended on third-party pages.

Schindler's "incremental" framing has to coexist with Google's own disclosure that these incremental queries pay less. Neither the earnings call nor the reporting put a dollar figure on the per-query gap between AI Mode and classic search ads.